Who steered ships toward 'Fat Leonard'?

A few middle managers drive lucrative ship schedules

Leaders from the U.S. aircraft carrier Abraham Lincoln talk to Thai media after docking in Laem Chabang, Thailand, in January 2012. A federal court case alleges that this port visit and others were influenced by bribes to two mid-level U.S. Navy administrative officers in Asia.
— U.S. Navy photo

Leaders from the U.S. aircraft carrier Abraham Lincoln talk to Thai media after docking in Laem Chabang, Thailand, in January 2012. A federal court case alleges that this port visit and others were influenced by bribes to two mid-level U.S. Navy administrative officers in Asia.
/ U.S. Navy photo

While Navy officers seem to be dropping right and left in the “Fat Leonard” Asia bribery scandal, people familiar with how port calls work say only a few middle-management paper-pushers really drive ship schedules, and all the money that follows in their wake.

Retired Navy officers say the scenario of a few well-placed bad apples makes more sense than widespread graft among Navy skippers docking in Asia.

“I think Leonard pushed, pushed, pushed, and he eventually found a couple of guys who were seduced into behavior that they had to know was grossly inappropriate,” said retired Capt. Kevin Eyer, a San Diego resident who commanded three Navy cruisers during his career.

“I actually do find all of this to be outrageous and surprising and it really does challenge my imagination. Do I believe it happened? I do.”

U.S. Attorney Laura Duffy alleges that Francis defrauded the Navy of millions of dollars since at least 2009 with the help of Cmdrs. Michael Misiewicz and Jose Luis Sanchez, mid-level officers on the operations and logistics staff of the U.S. Seventh Fleet in Asia.

They allegedly steered ships to ports where Francis’ company has a stronghold or gave him ship schedules and behind-the-scenes details of Navy contracting strategy. Francis — known in Navy circles in Asia as “Fat Leonard” because of his size — and Sanchez have hearings in downtown San Diego on Wednesday and Thursday.

A Naval Criminal Investigative Service agent in Virginia, John Beliveau, has also been charged. He is alleged to have leaked details of the investigation to Francis.

The scandal rocketed up the Navy chain of command Nov. 8 when a three-star and a two-star admiral were implicated, stripped of classified access and placed on leave, though not charged.

The Navy won’t say what the allegations against Vice Adm. Ted Branch and Rear Adm. Bruce Loveless are, just that they pertain to jobs held before they donned stars.

The word around Navy circles is that ship skippers who made port calls in Asia are being scrutinized, as they have advance notice of ship movements and can ask for certain port calls.

Branch commanded the San Diego-based aircraft carrier Nimitz in 2004 and 2005, back when he was a captain.

In early October, the Navy removed Capt. Daniel Dusek as skipper of the Japan-based amphibious ship Bonhomme Richard. The reason given was a U.S. Justice Department investigation that “negatively affected Dusek’s leadership ability and was a distraction.” Insiders say it was the bribery investigation.

There is some concern the case might become overblown and result in guilt by association.

“Here’s the problem that I worry could happen. Let’s say our last night in port we got invited to a dinner party. It’s somebody from the embassy and the husbanding agent (Francis’ job) was there,” said one retired three-star admiral who spoke on background because of his current job.

“I’m thinking back on this 15 years later, I didn’t pay any attention to who paid the bill. It could have been the husbanding agent who paid.”

According to federal complaints Misiewicz and Sanchez took more than just a free chicken dinner.

The two officers allegedly got cash, luxury trips, prostitutes and even Lady GaGa and Lion King tickets.

Francis and his company Glenn Defense Marine Asia apparently first targeted Misiewicz when the officer was skipper of the Mustin, a Japan-based destroyer.

But a Glenn Defense manager — the unnamed former Navy officer “EA” identified in court papers as a San Diego resident — already knew Misiewicz’s next assignment was deputy operations officer for the Seventh Fleet.

In that job, beginning in January 2011, Misiewicz had his hand on the deployment schedules of U.S. ships, subs and aircraft from Japan to Russia to Australia.

“We are changing faces, but keeping our lines of communications with C7F (commander, Seventh Fleet),” the manager wrote to Francis in an email.

Who was the prior “face” at the Navy’s headquarters in Asia?

Sanchez was deputy logistics officer there from April 2008 to April 2010, leaving one month before Glenn Defense began grooming Misiewicz.

The difference between an aircraft carrier pulling into Yokosuka, where it docks at a military base, and pulling into one of Francis’ “pearl ports” is pretty big money.

For example, in early January 2012 the aircraft carrier Abraham Lincoln visited Laem Chabang, Thailand, instead of Manila in the Philippines.

According to court documents, Misiewicz told Francis in an email that he was “fighting hard” to keep the carrier on course for Laem Chabang, where Glenn Defense was the big player.

Francis’ company invoiced the Navy $884,000 for services such as food, fuel and cars during that stop, of which $500,000 is alleged to be overbilled.

The calculus of port visits is fairly complicated, according to retired officers.

A ship on a six-month deployment will get roughly seven port calls. The skipper can ask for his preferred ports — Hong Kong and Phuket, Thailand, for example. Like his sailors, the ship’s commanding officer wants fun towns with lots to do during his time off.

But political considerations also come into play. U.S. interests dictate that American warships stop at ports where diplomatic ties need to be tended to, such as Vietnam. Other port calls, such as in Yokosuka and Guam, are working breaks that might include meetings and ship maintenance.

In Asia, the final itinerary is handed down from Seventh Fleet. The Navy’s local Fleet Logistics Commands oversee long-term ship services contracts with companies such as Glenn Defense.

A career supply officer, Sanchez went on from his Seventh Fleet job to work in Fleet Logistics Command units in Singapore and Yokosuka.

As of June 2011, Francis’ company had three regional contracts to provide services around Southeast and East Asia, the Pacific Isles and Australia.

Since the arrests began last month, the Navy has canceled nine Glenn Defense contracts worth $200 million and blocked future business.

Retired officers familiar with Navy operations in Asia say middle managers such as Misiewicz and Sanchez usually do the grunt work of ship scheduling. Officers above them would sign off without too much scrutiny.

However, given the political importance of some port calls, alarm bells may have gone off high up if certain locations became frequent stops without good reason.

“If all of a sudden everybody was going to one or two ports, red flags would start going off at the admiral level right and left,” the retired three-star said.

Former officers say it’s likely that the Fat Leonard scandal is now discussed almost daily at the highest levels of the Navy.

The current chief of naval operations, Adm. Jonathan Greenert, was commander of the Seventh Fleet from 2004 to 2006.

Greenert’s spokesman said on Monday that the admiral has met Francis, as he met many Navy supporters during his time in Asia.

“It was not uncommon for CNO to see Mr. Francis at official events in Southeast Asia or aboard USS Blue Ridge,” the Seventh Fleet command ship, Capt. Danny Hernandez said in an email.

But several people interviewed for this story don’t think that the bribery scenario — despite its lurid details about prostitutes being ordered for “wolf packs” of naval officers — will be as big a black eye as the Navy’s 1991 Tailhook debacle.

That scandal, when groups of drunken aviators groped women in a hotel corridor, went on to color the careers of hundreds of Navy fliers. Just admitting that you had attended the Tailhook convention was said to be problematic for advancement.

“It makes you feel bad that people in the Navy would do this kind of stuff for not a lot of money, really,” said retired Rear Adm. Terry McKnight, who commanded amphibious ships during his career. “It just makes it look bad on the service.”

But, he added, “Tailhook, there were (many) people at Tailhook. I think this is an isolated incident where a couple people went wrong. These admirals … I have no idea why they were brought down, but I think it’s just a few people.”